The full-cost method is permitted in the US despite the fact that it may involve the matching of past costs with future revenue and current period costs against revenue from previously discovered reserves in an entirely different area.

Question

Quizplus · Accepted Answer

The statement is true. The full-cost method is an accounting method permitted in the US for companies in the oil and gas industry, where all costs associated with exploration and development of oil and gas reserves are capitalized and then depleted over time as the oil and gas is extracted. This method includes the matching of past costs with future revenue and current period costs against revenue from previously discovered reserves, even if they are in an entirely different area.

The Full-Cost Method Is Permitted in the US Despite the Fact